Raja Bahadur International Receives Upgraded Stock Call, Shows Positive Results in Textile Industry

Raja Bahadur International, a microcap company in the textile industry, has recently received an upgraded stock call from MarketsMOJO. The stock has been upgraded to 'Hold' on September 26, 2024.
The company has shown positive results in the first half of 2024, with a higher profit after tax of Rs 0.27 crore and a record high return on capital employed of 7.09%. Additionally, the net sales for the quarter were also at a record high of Rs 7.19 crore.

Technically, the stock is currently in a bullish range and has shown improvement from a mildly bullish trend on September 26, 2024. Multiple factors such as MACD, Bollinger Band, and KST indicate a bullish trend for the stock.

Raja Bahadur International has also outperformed the market, generating a return of 91.62% in the last year, compared to the market's return of 41.08% (BSE 500).

However, the company's high debt-to-equity ratio of 11.19 times indicates a weak long-term fundamental strength. The average debt-to-equity ratio is even higher at 14.32 times, and the return on capital employed is only 2.04%, indicating low profitability per unit of total capital.

With a ROCE of 6.4, the stock is currently trading at a very expensive valuation, with an enterprise value to capital employed ratio of 2.1. However, it is still trading at a discount compared to its average historical valuations.

In the past year, while the stock has shown a significant return of 91.62%, its profits have only increased by 116.7%. This results in a PEG ratio of 1.6, indicating a slightly overvalued stock.

Overall, Raja Bahadur International's upgraded stock call to 'Hold' suggests a neutral stance for investors. While the company has shown positive results and a bullish trend, its high debt and expensive valuation should be considered before making any investment decisions.